Yum Brands, the parent of KFC, Pizza Hut, and Taco Bell, was hit by a ransomware attack, leading to hundreds of locations closing.
Yum Brands acknowledged the attack in a statement Wednesday, saying its IT systems were compromised.
On January 18, 2023, Yum! Brands, Inc. announced a ransomware attack that impacted certain information technology systems. Promptly upon detection of the incident, the Company initiated response protocols, including deploying containment measures such as taking certain systems offline and implementing enhanced monitoring technology. The Company also initiated an investigation, engaged the services of industry-leading cybersecurity and forensics professionals, and notified Federal law enforcement.
The company says the overall impact was relatively limited. Most important, Yum Brands says there is no evidence any customer data was stolen.
Less than 300 restaurants in the United Kingdom were closed for one day, but all stores are now operational. The Company is actively engaged in fully restoring affected systems, which is expected to be largely complete in the coming days. Although data was taken from the Company’s network and an investigation is ongoing, at this stage, there is no evidence that customer databases were stolen. While this incident caused temporary disruption, the Company is aware of no other restaurant disruptions and does not expect this event to have a material adverse impact on its business, operations or financial results.
“We are a marketplace that sells demand generation,” says Grubhub CEO Matt Maloney. “We sell growth. That’s what our primary product is. We’re not a logistics company. We do logistics because we know that’s an end to get to restaurant growth and make money off our logistics. The gross margins on the logistics are not fabulous. The gross margins on the demand generation are fabulous which is why I differentiate between a logistics company and demand gen company. If you’re selling consumers, you’re selling growth, and you can charge a lot for that.”
Matt Maloney, CEO of Grubhub, discusses with Jim Cramer on CNBC how Grubhub is in the business of driving growth for restaurants and is not just a logistics company:
The American Public Has Just Adopted Digital Ordering
This is our fifth anniversary of our IPO. The market now is ten times what I thought it was five years ago. It’s because the American public has just adopted digital ordering as their preferred way to engage with their local restaurants. We are not just marketing to Millennials. We are marketing on national television across all channels, all time zones, and hitting all segments. We just see that people realize that digitally ordering on their app or on their desktop is just easier.
Of course, our ad campaign is working. I wouldn’t have it on TV if it wasn’t working. You think about it this way. You know your LTV, your lifetime value of your customer, once they start ordering we know that they’re lifers. They’re on forever. We can make that revenue model and then we know how much it cost to put the ad on there. So yes, over time, as people see the ad, more and more it becomes less and less effective. But we’re nowhere near our LTV.
https://youtu.be/qpyVP-JhToc
Grubhub National TV Commercial
I have always been willing to be extremely aggressive investing in the future. Historically, I was bound by the amount of money I could invest. The reception of these communications just weren’t hitting the public and they weren’t working as well. Then around the third quarter of last year, we saw that we could spend way more than we had historically. I’m just talking about effectiveness. Spending it effectively. We came to the street on our third quarter earnings call and said we see opportunity and we are going long in the fourth quarter.
Yum Made $200 million Investment – They Believe in Our Story
People are going to say where’s the beef, the old Wendy’s commercial. They’re like show me the money. (We don’t have Wendy’s) but everyone talks to everyone in this industry. I think over time exclusivity is just not going to happen. (We have Yum) and Yum is the biggest restaurateur in the world. YUM is an incredible brand which includes Taco Bell, KFC, and Pizza Hut. They are very forward-thinking. They invest in technology a lot and they wanted to make a fundamental partnership and we wanted to understand what the brands needed from a partner.
Yum made a $200 million investment because they believe in our story. We didn’t need the investment because we have a very healthy balance sheet. What it did it was really bringing the support of the young brand and the franchisees into Grub. As a tight partnership, we’re able to execute on technology and growth for them in a way that nobody else in the industry is doing right now. I totally disagree (that we aren’t making money from this partnership).
We Are a Marketplace That Sells Demand Generation
We are a marketplace that sells demand generation. We sell growth. That’s what our primary product is. We’re not a logistics company. We do logistics because we know that’s an end to get to restaurant growth and make money off our logistics. The gross margins on the logistics are not fabulous. The gross margins on the demand generation are fabulous which is why I differentiate between a logistics company and demand gen company.
If you’re selling consumers, you’re selling growth and you can charge a lot for that. That’s the profitable side. Everyone else in my industry is a logistics company which has razor thin margins. One of my competitors said they’re the next FedEx. Do you really want to be the next FedEx? There’s the multiple that we can get as marketplaces and there’s the multiple that logistics companies can get.
Everyone Would Prefer to Order Digitally
I think that everyone in the country would prefer to order digitally than order on the phone. That’s why we acquiredTapingo. It’s an incredible acquisition because it gives us further scale on campuses. Tapingo is a pickup focused product. So here’s what you need to think about. We sell growth, we sell orders. I don’t care if that’s a pickup order, a delivery order, a self-delivery order, or a catering order.
Everyone else in my industry only does delivery facilitated by that platform. Because we partner with the restaurants (which means) the restaurants are subsidizing part of our transaction fee, we are always cheaper. That’s what people don’t understand. There’s a lot of bait and switch pricing going on (from competitors).
We Are a Marketplace That Sells Demand Generation, Says Grubhub CEO
Yum Brands which owns Taco Bell, KFC, Pizza Hut and other restaurant brands are at the forefront of technological innovation. Yum also isn’t afraid to experiment with seemingly outlandish ideas either such as their announcement of the Toyota Tundra Pie Pro which makes pizza on the go.
“We love our relationship with Grubhub, it’s a great partnership,” says Yum Brands CEO Greg Creed. “By the end of the year in the U.S., we’ll have about 2,000 KFC’s and probably close to 4,000 Taco Bell’s delivering. In the stores that are already delivering we’re getting check increases and incremental sales that are coming from it, so we’re very excited about this partnership. We think it obviously bodes well for the future sales growth for both KFC and for Taco Bell in the U.S.”
Driverless Cars and Robots Making Pizzas is Our Future
Pizza Hut has partnered with Toyota to develop a zero-emission Tundra PIE Pro, a mobile pizza factory with the ability to deliver oven-hot pizza wherever it goes. The full-size pizza-making truck was introduced at Toyota’s 2018 Specialty Equipment Market Association (SEMA) Show presentation.
“I love our partnership with Toyota,” added Creed. “This is really about technology, this is about robotics, this is about what the future is envisioning. Driverless cars, robots making pizzas, this is all in our future. Is it in our future next week? No, but is it in our foreseeable future, absolutely. Everything that we can do to make the brands more relevant, make them easier to access and more distinctive, that’s what will lead to continued success, not just for Pizza Hut but also at KFC and at Taco Bell.”
Pizza Hut Partners with Toyota on the Tundra PIE Pro
Pizza Hut has partnered with Toyota to develop the one-of-a-kind, zero-emission Tundra PIE Pro, a mobile pizza factory with the ability to deliver oven-hot pizza wherever it goes. The full-size pizza-making truck was introduced at Toyota’s 2018 Specialty Equipment Market Association (SEMA) Show presentation.
“Nothing tastes better than a fresh Pizza Hut pizza straight out of the oven,” said Marianne Radley, Chief Brand Officer, Pizza Hut. “The Tundra PIE Pro brings to life our passion for innovation not just on our menu but in digital and delivery in order to provide the best possible customer experience.”
Christina Aguilera visited her father’s homeland for the first time as part of the Yum! Brands’ initiative to reach out to poor and hungry children in the region. Aguilera serves as a volunteer spokesperson for Yum’s World Hunger Relief program.
The award-winning pop diva has already visited Rwanda, Haiti, and Guatemala but her recent trip to Ecuador was special to her in many ways. “This particular trip was sort of extra-special for me because it is my blood and heritage. My father was born in Ecuador and my grandfather was born in Quito,” Aguilera told the Associated Press in an interview on Monday. There she saw how the people in refugee areas were struggling to survive. According to her, she especially chose to visit Ecuador because she has always wanted to see where her father came from since she did not have a “consistent relationship” with him all her life.
Aguilera visited schools and launched a feeding program as part of Yum’s relief efforts, and witnessed how kids have to travel far to get to their schools.
In line with this, the singer filmed a public service announcement to raise hunger awareness, which is set for release next month.
Yum! Brands Inc. said they have amassed $600 million in cash and food to be donated to the UN World Food Programme and other humanitarian organizations. Aside from the Public Service Announcement, Aguilera has also been disseminating information through World Hunger Relief posters in well-known food establishments like Pizza Hut, Taco Bell, and KFC and through the website HungerHope.com.
